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Booz Co Campaigns Capabilities Social Media Viewpoint


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Booz & Company viewpoint by Christopher Vollmer and Karen Premo focusing on the capabilities companies require to drive social social media success

Booz & Company viewpoint by Christopher Vollmer and Karen Premo focusing on the capabilities companies require to drive social social media success

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  • 1. Perspective Christopher Vollmer Karen PremoFrom Campaignsto CapabilitiesThe Impact ofSocial Media onMarketing and Beyond
  • 2. Contact InformationNew YorkChristopher VollmerPartner+1-212-551-6794christopher.vollmer@booz.comKaren Booz & Company
  • 3. EXECUTIVE Booz & Company and Buddy Media, the social enterprise software leader, teamed up in 2011 to identify the capabili-SUMMARY ties that companies need to excel in social media. This study, Campaigns to Capabilities: Social Media and Marketing 2011, incorporated a quantitative survey of 117 leading com- panies and a series of in-depth interviews with senior execu- tives from across the marketing and media ecosystem. The study focused on how leading companies are transforming their strategies, skills, and processes to enable social media to play an expanding role in their marketing efforts and in their enterprises as a whole. Unlike much of the research to date, which has focused on the tactics that companies are pursuing in social media, the Booz & Company/Buddy Media study concentrated exclusively on the capability priorities associated with social media, and the focused actions com- panies need to take as their social and digital media activities increase in scale. As more companies refine their use of social media, it will dramatically transform how they connect their brands with consumers, and how they define and build their marketing capabilities.Booz & Company 1
  • 4. BURBERRY: A creativity that ensures its designs are timeless, yet contemporary. Now views and about 30,000 subscribers as of February 2012). Partnering withSOCIAL MEDIA there is a new defining element to Twitter, Burberry also created theSUCCESS STORY Burberry’s success: the creation and distribution of branded digital and “Tweetwalk,” an innovative, real-time social media experience where every social media experiences. fashion show element was tweeted before the models hit the runway. Just look at how dramatically This gave Burberry’s Twitter followers Burberry has reimagined its fashion (773,000 as of February 2012) shows—once elite, exclusive, and unique “see it first” access ahead ofBurberry Group has a rich heritage effectively off-limits to the brand’s everyone including Vogue editor Annathat would make many companies many fans—for the era of social Wintour. By leveraging the scale andenvious. Founded 156 years ago, media. In 2011, Burberry streamed a engagement of Facebook, Twitter, andthis global purveyor of luxury live video feed of its spring/summer YouTube, Burberry has effectivelyapparel has long been defined by an and fall/winter shows, distributing its reinvented its fashion shows asovert Britishness, a trio of instantly content directly to fans on Facebook content-rich social experiences thatrecognizable icons (the trench (10.7 million as of February 2012) now engage millions of fans andcoat, the trademark check, and the and to video viewers on Google’s interested consumers, rather than just“Prorsum” knight logo), and a deft YouTube (11.0 million unique video a few insiders. A new defining element to Burberry’s success is the creation and distribution of branded digital and social media experiences.2 Booz & Company
  • 5. The ability to tell stories directly to development, and real-time analytics and start, command and control”consumers via social media is also has enabled the company to develop model of brand management isreshaping how Burberry launches powerful, direct, and multiplatform morphing into a decidedly morenew products. When its fragrance connections with consumers who dynamic marketing model. It isBody debuted in the fall of 2011, want to engage with the brand. always on. It is iterative. It is content-Burberry’s Facebook fans were invited For Burberry, this strategic focus and people-intensive. It is social byto a “fan-first” sampling promotion on marketing innovation has been design: focused on participation andthat generated more than 225,000 transformative. “Burberry is now activation, not just awareness andrequests in the first week alone. The as much a media-content company consideration. And as Burberry’sBody video campaign, starring actress as we are a design company,” says example illustrates, this new modelRosie Huntington-Whiteley and creative director Christopher Bailey. requires very different capabilitiesshot by famed fashion photographer In short, Burberry has been successful from those that most companiesMario Testino, premiered not on in social media because it rapidly put possess today.broadcast TV but on in place a new and distinctive set ofand the brand’s YouTube channel, capabilities to support the digitization In Campaigns to Capabilities: Socialfurther supported by a launch day of its brand and the consumer Media and Marketing 2011, three“takeover” of YouTube’s homepage experience around it. major capabilities come to the fore:in 13 countries. Consumers could also community management, contentbuy the scent with a simple click on Looking at Burberry’s moves—and development, and real-time analytics.the Burberry Facebook Body tab; in those of other innovators like Audi, For companies in all sectors, thethis way, the brand closed the loop Coca-Cola, Diageo, Nike, Procter evolution of these capabilities,with its community of fans, taking & Gamble, and Starwood Hotels & concentrated around the “big three”them on the digital path to purchase. Resorts Worldwide—it is clear that social media platforms of Facebook, social media, in just a few years, has Twitter, and YouTube, representsWhat makes Burberry so successful in affected not just how decisions about a major opportunity to generatesocial media? The deliberate building the media mix are being made, but business value by building powerful,of specific capabilities around how brand marketing itself is being lasting relationships with consumerscommunity management, content prosecuted. The traditional “stop through digital communities.Booz & Company 3
  • 6. are the tools available to make it most influential medium,” says AjazTHE GROWTH OF happen: social media platforms such Ahmed, chairman and founder ofSOCIAL MEDIA as Facebook (850 million users), AKQA, one of the world’s leading Twitter (300 million users), and digital advertising agencies. “Social YouTube (where 100 million people networks are now the operating sys- interact with one another by liking, tems for consumers’ lives. They have sharing, or commenting on videos rapidly become indispensable.” every week). Through social media, companies can connect with consum- Many companies are naturallyRecommendations. Referrals. Buzz. ers directly at a global, national, or attracted by the promise of a large-Marketers have long known that local level, expanding their reach scale media offering that aggregatesconsumers value the recommenda- through a few well-designed moves or self-selected consumers—eager totions of a trusted friend or expert targeting specific groups of consumers share stories, content, and recom-more than any form of advertising. based on more defined communities mendations about brands andSince the emergence of social diffu- of interest. products—and enables the targetingsion theory in the 1950s, marketers of these consumers based on actualhave sought to harness the power of The growth of social media among preferences and behaviors. Marketerssocial networks and word of mouth consumers since Facebook’s launch in have responded by increasing theirto influence consumers’ decisions 2004 has been explosive. Consumers participation in social media, mostabout what they like and what they now spend most of their digital time typically via a dedicated presencepurchase. The importance of social there. According to Nielsen, social such as a fan page, a newsfeed, or amarketing is continually confirmed by media and blogs account for 23 per- branded channel and by incorporat-research—most recently by Nielsen’s cent of all consumer activity online. ing social media elements into theirGlobal Online Consumer Survey, This is more than twice as much marketing campaigns. According towhich showed that 90 percent of con- as the next largest category, online eMarketer, 80 percent of companiessumers trust recommendations from games, where consumers spend only are using some kind of social mediapeople they know. Nielsen found that about 10 percent of their time. Social platform or tool in their marketingthis social recommendation factor in media is becoming the hub of all today, nearly double the percentagefact tops all other media sources and digital activity: as the starting point in 2008. Advertising on social mediaadvertising formats, including TV (62 for engaging with family, friends, and has grown 40 percent per year frompercent), newspapers (61 percent), acquaintances, and beyond that, as a 2008 to 2011, and now representsand magazines (59 percent). way to discover content and connect US$5.5 billion in global advertising with brands. Whether it’s a hot article spending, according to eMarketer.Marketers have, however, histori- to read, a must-see video, or a brand This amount also represents only acally lacked the key ingredient for they adore, consumers look for it on fraction of marketers’ total socialsocial word of mouth to be a bigger Facebook, Twitter, or YouTube. media investment, as it generally doespart of their playbooks. They cannot not include the greater expense associ-generate it at a scale comparable to “Digital technology has become ated with developing and maintainingconventional mass media. Only now the most important, fastest, and a branded social media presence. “Social networks are now the operating systems for consumers’ lives. They have rapidly become indispensable.”4 Booz & Company
  • 7. CAMPAIGNS spending to social media. Today, Fortune 500 companies spend only • Social media is a CEO agenda item for 40 percent of the respondingTO CAPABILITIES a fraction of their digital marketing companies. budget, which itself averages 15 to 20 percent of total marketing spend, • Social media is a top marketing on social media. For example, 89 priority for 2012 for about 60 percent of respondents to the percent of the respondents. Booz & Company/Buddy MediaMost companies to date have study spend less than 10 percent • 64 percent of companies have afocused their social media efforts on of their digital marketing budgets dedicated team for social media.Facebook, Twitter, and YouTube, on social media. The reality israther than on a broad range of social that though there have been some • 78 percent of companies believenetworks, blogs, and location-based high-profile campaigns—Coca- social media efforts enhance theirservices. The dominance of these Cola’s Expedition 206, Nike’s marketing effectiveness.“big three” platforms, especially Write the Future, and P&G’s OldFacebook, is confirmed by the Spice Responses, for example—and • 95 percent of companies expect toBooz & Company/Buddy Media there are some early leaders like invest more in social media.research. Ninety-four percent of Burberry, most companies are stillrespondents regard Facebook as at the early stages in terms of their • 96 percent of companies are devel-one of their top three social media social media efforts. Our Campaigns oping a specific strategy for socialplatform priorities. Seventy-seven to Capabilities study revealed that media.percent include Twitter in this group. companies recognize the need toAnd 42 percent say YouTube belongs expand their social and digital The leading companies are shiftinghere too. marketing efforts significantly, and their focus from campaigns—exper- many are taking concrete steps to do iments, tactics, or one-off effortsEven as their investments grow, most so. Relevant findings from the that are challenging to replicate—tocompanies have yet to allocate a Booz & Company/Buddy Media capabilities that enable them to moresignificant amount of their marketing study include the following: reliably and consistently deliver aBooz & Company 5
  • 8. distinctive outcome, relevant to their target consumers, and in real-time sions that competitors cannot catchbusiness, through the right combina- insights to analyze consumer behavior up. To accomplish this, companiestion of processes, tools, knowledge, and measure impact (see Exhibit 1). must actively transform their keyskills, and organization. Specifically, business functions. This transforma-success in social media requires com- Leading companies are not just tion typically begins with marketingpanies to develop deep capabilities building these capabilities, but also but will ultimately expand to includein new areas: in community manage- investing to make them distinctive: so customer service, consumer insight,ment to grow and activate audiences, ingrained, proficient, and individually sales, and even product content development to engage tailored to their strategies and mis-Exhibit 1A Capabilities System for Social Media Success Primary Capabilities 1. Community Management: Monitoring, engaging, servicing, and activating a social media presence and fan base 1. Community Management 2. Content Development: Creation and sourcing of brand- and audience-relevant content 3. Real-Time Analytics: Ability to analyze and interpret social media activity as it happens c. Consumer a. Engagement Insights Optimization Supporting Capabilities a. Engagement Optimization: Design and execution of the social media experience to drive participation and activation 2. Content b. Content Management: Tracking, cataloging, storage, and serving 3. Real-Time Development of content assets of all types Analytics c. Consumer Insights: Understanding of drivers of community b. Content behavior and interest ManagementSource: Booz & Company6 Booz & Company
  • 9. MARKETING: the periphery to the center of most marketing agendas. An even more fundamental develop- ment is the influence of social media onTHE FOCAL the marketing function itself at manyPOINT FOR Marketers are owning the social media agenda because in most companies they companies. The adoption of social media by companies is in fact changingSOCIAL MEDIA own the brand or product positioning, the practice of marketing from one ofINNOVATION the market-facing value proposition, and the composition of the marketing “brand management,” where cam- paigns are tightly controlled by brand mix. They are also the executives most executives and dominated by paid likely to be in the flow of consumer media, to one of “brand curation,” conversations and insights. For many where campaigns are designed by mar- brand-focused marketers, social media keters and characterized by a seeminglyThough social media may be used sits tantalizingly high on top of the less orchestrated and linked mashup ofbroadly across an enterprise, it is the purchase funnel—in contrast to other paid, earned, owned, and shared mediamarketers who effectively “own social” forms of digital advertising, such as (see Exhibit 2). This new model is alsoin 81 percent of the companies that the search and display banners that more dynamic, real-time, and itera-participated in the Booz & Company/ are more often associated with direct tive. Its core tenets are engagement,Buddy Media study. Today, advertis- response marketing. In discussions with participation, and advocacy. It connectsing is the dominant use case for social Booz & Company for this study, many brands directly to consumers, and alsomedia, with 96 percent of companies senior marketers who have not spent enables brands to connect consumersusing social media to support advertis- significantly on digital to date stressed to one another. Mark Parker, Nike’sing objectives. Significantly, companies that they are looking at social media CEO, described the positive impact ofare also prioritizing the integration of as more of a branding tool because of this new model on his business on asocial media into their overall market- its interactive nature and its ability to recent earnings call: “Social network-ing efforts, rather than developing forge relationships between consumers ing and digital communication isislands of specialized expertise. For and brands. Thus, when asked where helping us unify and expand the familyexample, 65 percent of companies are they see the most benefit from social of sport. We’ve never been closer toactively planning to integrate social media, 90 percent of respondents consumers as they continue to extendmedia into all of their advertising and said “brand building,” 88 percent their reach and connect even more withmarketing activities—an important cited “buzz building,” and 81 percent each other, with their sports heroes andsign that social media is moving from replied “consumer insights.” their favorite teams.”Exhibit 2Brand Management Moving to Brand Curation Traditional Marketing Model New Marketing Model Anchored around awareness Anchored around participation and activating fans Focused on procuring paid media Focused on integrating paid, earned, owned and shared media Emphasis on being in control of media messaging Emphasis on conversation and relationship value Digital expertise anchored in specialists and COEs Brand managers are “universal soldiers” with digital expertise Fixed, turn on/turn off, and long lead times Dynamic, always on, and iterativeSource: Booz & CompanyBooz & Company 7
  • 10. NEW Everyone knows that a key ingredient is a party and you’re the host. There for a great dinner party is a switched- might be someone in the corner—beCAPABILITIES on host who curates a fabulous mix of generous and gracious and invite himREQUIRE NEW guests, stimulates lively and interesting in. There are stars who will flit in and conversation, and graciously attends to leave. The whole point is to get peopleMIND-SETS a variety of needs throughout the eve- together.” ning. Terrific food, drink, and activities enable people to connect, engage, and As anyone who has hosted a successful linger. The host knows how to read dinner party knows, it takes planning, the room, “analyze” the party in real effort, and care to create an appealing time, and make rapid adjustments to social environment—a place where improve it—a quick tweak to the seat- guests feel welcome and where they ing chart, a personal introduction to comfortably engage in rich, interesting ensure the right contact is made, or a conversations, sharing thoughts and subtle change to the playlist to enhance views with friends, old and new. The the evening’s ambience. All of this best hosts make it appear effortless, but makes guests eager to return. they privately acknowledge how much work it takes. As companies seek to The ingredients of a successful dinner expand and strengthen the impact of party—including the central role of their social media efforts, marketers are the host—is a perfect metaphor for the learning to play the role of the “host” skills and mind-sets that companies with increasing levels of sophistica- need to build a distinctive social media tion. For the vast majority of them, it capability. As one brand manager from requires building new capabilities that a major cosmetics company puts it, have not been part of their traditional “You have to realize that social media tool kit.8 Booz & Company
  • 11. CAPABILITY critical to ensuring that a brand’s social media community is healthy, • Curating: overseeing the editorial experience; stimulating meaningfulPRIORITY 1: active, and growing. Furthermore, discussion; making content andCOMMUNITY once visitors become fans, companies have the responsibility to listen to conversation discoverable and interesting; ensuring that theMANAGEMENT them and reward their behavior brand’s voice and presence are with an “always on” social media coherent and authentic experience that is responsive, interesting, and attentive. If not, • Responding: providing service to companies may face disappointment the community; helping to resolve and disfavor from many of their issues, questions, and problems; most valued consumers. Companies connecting to advocates andAt most large companies, the also need to ensure that their social opinion leaders; creating emotionalcutting edge of marketing can be communities expand in directions connections with fansfound in social media communities that are coherent with their businesstoday. As companies begin building goals. For all of these reasons, strong • Measuring: analyzing fans’brands via Facebook pages, Twitter community management has become activities and community behaviors;feeds, YouTube channels, and even imperative for social media success. tracking effectiveness of campaignsGoogle+ circles, they realize quickly against business and brandthat establishing a social media Most marketers know how to manage objectives; assessing communitypresence is only the beginning. brands, not real-time communities. vibrancy, sentiment, and growthIt’s the equivalent of sending the The skills required for communityinvitations to a dinner party. Thus, management stretch well beyond those • Innovating: anticipating whatcommunity management—the art associated with traditional brand is next for a brand’s fan base inand science of convening and hosting management. There are five core new content, tools, and socialfans in social media—has become a proficiencies: or digital media experiences (forvitally important new capability for example, mobile, apps, and nichecompanies and their marketers. • Listening: understanding what communities) fans in the community are saying;Community management involves identifying hot topics, what fans Not surprisingly, these new require-engaging, monitoring, servicing, and are doing and sharing, and why; ments and their vital importanceactivating a company’s social media creating a two-way feedback loop concern many companies. About 50fan base across multiple social media that drives consumer insights percent of the survey respondentsplatforms. This discipline has become said the lack of sufficient community The skills required for community management stretch well beyond those associated with traditional brand management.Booz & Company 9
  • 12. management resources in their orga- Community management is a described the ideal job spec this way:nizations represents a major barrier to dynamic, complex, and people- “The guy who runs Facebook for us issocial media success (see Exhibit 3). intensive function, one that cannot be an über-fan. That’s the kind of personFurthermore, their top concern around outsourced lightly. Senior executives you need.”social media is the labor-intensity of recognize that community manage-community management: 61 percent ment is central to social media success Successful community managementof the respondents expressed concern, and that they need dedicated in-house also requires a fusion of technical andcompared to only 13 percent who are expertise to make it happen sustain- creative expertise. Campaign updatesfocused on social media’s overall cost. ably. Already, among the companies (such as stories, pictures, news,Despite the meteoric growth of social surveyed by Booz & Company and videos, slide shows, and polls) mustmedia platforms, many companies Buddy Media that have their own ded- be drafted, scheduled, and postedare still not fully comfortable with icated social media staffs, two-thirds with an awareness of engagementthe digital megaphone inherent in this have internal resources dedicated spe- and sharing potential. Conversationsmedium; 58 percent are concerned cifically to community management. must be initiated. Fan responseswith negative word of mouth or PR, must be addressed. Multiple socialand 55 percent worry that they are Part brand champion, part chief media platforms—Facebook, Twitter,losing control of their brand messages. listener, part Superfan, and always YouTube, company blogs, etc.—must “mission control,” the community be managed with content sourced“You have to be on 24/7,” noted a management professional brings a and tailored for each. Throughoutsenior executive with a major apparel variety of skills to bear. Executives in all of this, campaign analytics andbrand. “You have to respond to community management need to be metrics must be reviewed and assessedcustomers all the time. Issues escalate experts on their brands, audiences, to determine what is resonating andso fast, you can be held hostage by and communities. They know them what is not, and community managerssomeone in social media.” inside and out. A senior executive must make decisions on the fly to with a major entertainment company continually enhance the communityExhibit 3Top Five Organizational Challenges for Social Media PERCENTAGE OF SURVEY RESPONDENTS INDICATING THIS WAS A SIGNIFICANT OR VERY SIGNIFICANT CHALLENGE 57% 52% 51% 48% 43% Not Enough Insufficient Resources Lack of Difficulty of Not Core to Cross-Departmental Dedicated to Understanding Among Proving ROI Overall Strategy Collaboration Community Management Senior LeadersSource: Booz & Company/Buddy Media Campaigns to Capabilities: Social Media and Marketing 2011 survey results10 Booz & Company
  • 13. experience and ensure that it isconnected to the brand’s objectives. Starwood: Where Social Means More Than Marketing Even before the term “social media” was coined, Starwood HotelsIn addition to the technical and & Resorts had a dedicated professional in the field. “He was calledcreative requirements, community the ‘Lurker,’” says Alyssa Waxenberg, the senior director of emergingmanagement must have a platforms for the hotel chain. “He was on our customer service team,demonstrable “human touch” that is and he would engage our customers on travel forums like FlyerTalk. Herecognized as genuine and authentic answered questions, resolved issues, and showed us complaints thatby the fans. There is no substitute he came across online. He became something of a mini-celebrity in thefor strong person-to-person skills. hotel industry and a real champion of our guests.”Community managers will fieldquestions touching on all parts of Starwood’s Lurker was only an introduction to the impact of sociala business and therefore need to be media; it did not take long for senior management to catch on to thewell networked and empowered to value of this form of marketing. The owner of such major brands asmove across departments to respond Westin, St. Regis, Sheraton, and W, Starwood uses social media to geteffectively. Fifty-seven percent of in front of current and potential customers with information, offers, andthe survey respondents reported personalized experiences intended to surprise and delight guests—andthat insufficient cross-departmental to cement their loyalty to the company’s brands. “We are leveragingcollaboration is a major obstacle to social media in all we do,” says Waxenberg. “We have Facebook tabs,social media success. In interviews Facebook walls, Twitter channels, and Foursquare tie-ins with our loyaltyconducted for this study, executives program. All of these enable us to broaden our reach, follow up in realrepeatedly stressed the need for “great time, and stay engaged with our guests,” she says.conversationalists”—extrovertswho enjoy interacting with others But social media is not strictly seen as an advertising vehicle. “You can’tand who are comfortable in a fluid, confine social media to the marketing department,” says Waxenberg.spontaneous, and often unpredictable Perhaps the greatest change it has made for Starwood is in customerenvironment. This new kind of service. “It’s very easy now for people staying in one of our hotels tomarketing talent, like that great post a comment on one of our Facebook pages or tweet something. Wedinner party host, must also be able can address that guest’s concern or compliment immediately while theyto process data quickly and make are staying with us. This digital approach to delivering a great servicedecisions fast. Ninety-four percent experience has become differentiating for our business. And now weof the responding executives stressed can do it faster and make it more personalized than ever.”that the “ability to adapt and react To make this happen consistently, Starwood has developed a networkedquickly” is the single most critical approach to social media. A dedicated team within customer servicesuccess factor in social media. monitors social media channels in real time. This team connects directly to social media champions at individual hotels, along with the loyaltyMany companies are on the hunt to and marketing teams and other central departments. These connectionsrecruit managerial talent that can are critical for rapid response. If someone posts, “Hooray, we’re goingsupport high-quality, high-impact to the Westin in Maui for our 25th anniversary,” the team can reach outcommunity management. About 60 to that hotel and let them know to make that couple’s milestone anpercent of those investing in social experience that is truly memorable, personal, and special—from a hotelmedia are expanding their community they will most likely recommend to resources throughadditional hiring. Recognizing thesenew and fast-changing requirements,many companies are seekingcommunity management talentoutside the boundaries of traditionalbrand marketing, in areas such asjournalism, direct marketing, eventplanning, and public relations.Booz & Company 11
  • 14. CAPABILITY Like a party without the requisite For many companies, developing a food or drink, a social media robust social media content develop-PRIORITY 2: community without relevant content ment capability requires a completeCONTENT can quickly become a stale, empty reboot of their approach to develop- room. As a major wireless executive ing communications and campaigns.DEVELOPMENT explained, “We have to constantly “Old-time brand managers only did think about having the right content. TV,” said a major beverage marketer. Facebook penalizes you if people “Now brand managers have to think aren’t clicking—it forces you to about social in everything they do. deliver something engaging.” Do they have sufficient content they can share with their community? A social media community without relevant content can quickly become a stale, empty room.12 Booz & Company
  • 15. They are trying many new things manager Arsène Wenger. The aspiring opportunity to compete at the mostin order to have content to share— athletes were encouraged to enter elite levels. Social media allowedevents, contests, videos—with their the competition by uploading their Nike to take that insight global,communities.” “moment of glory” to Facebook, to transforming it into a compelling promote themselves with videos and digital media experience for mil-A powerful example of the impact photos, and to build a fan following. lions. AKQA’s Ahmed describesof social media on brand storytelling Nike then used invitation-only the strategy behind “The Chance”:is Nike’s “The Chance,” a global training events in 32 cities around the “There was no better way to tell theFacebook- and YouTube-centric world to select 100 global finalists ‘Just Do It’ story than by empower-competition developed by its agency who were chosen to compete for ing people to become better foot-AKQA. Over an eight-month period, eight professional contracts under the ballers and rewarding the very best75,000 young, undiscovered soccer eyes of Premier League scouts at the with a contract. Without the digitalplayers from 41 countries took Chance Final Trials in London. and social revolution, an idea like“the chance” to compete for a life- this would have never been possible.changing soccer contract with the Nike and AKQA zeroed in on the This campaign was seen by millions,Nike Academy. Millions of Nike consumer insight that is true in every influenced tens of thousands, and hasfans followed the competition, which competitive sport: Young athletes changed the lives of many.” Indeed,kicked off with a call to action want to prove themselves, they want 5.5 million fans actually pledgedon Facebook from famed Arsenal to be discovered, and they want the their support to various participantsBooz & Company 13
  • 16. during “The Chance,” and millions Twitter, that means immediacy. the company’s relatively low empha-more viewed various Nike- and With Facebook, it means making a sis on social media. “The celebritiesplayer-produced videos on Facebook creative, inspiring, and useful con- in these ads are looking to preserve aand YouTube over the course of the tribution to the community.” Unlike certain mystique. They can’t do thatcampaign. traditional advertising content, where in social, so it just doesn’t work.” In the goal is often awareness or brand contrast, Nike’s social media con-The story of “The Chance” highlights recall, the focus in social media is on tent is participatory, authentic, andhow brand storytelling and adver- content that stimulates real conversa- relevant, all by design. That’s thetising need to be designed to take tions and gets the consumer moti- decisive difference.advantage of the unique dynamics of vated to be involved and connected insocial media. “The most compelling the storytelling itself and in spreading Content is the glue in social media.stories,” says Ahmed, “are told by it around. It creates the “sticky” social valuebrands that use the inherent proper- and connection between a brand andties of social media to do something “We do a lot of magazine ads,” says its fan community. To be effective,you cannot do in other media. With a major apparel retailer, explaining marketers need to become digital The focus in social media is on content that stimulates real conversations and gets the consumer motivated to be involved and connected.14 Booz & Company
  • 17. publishers, competing aggressively expanding range of creative resources is effectively a “prime time,” bothfor consumers’ attention, engage- to accomplish all this. These include in time of day and day of the week,ment, and loyalty with high-value external entertainment companies, when the engagement rate withcontent just as media companies do. creative agencies, digital publishers, consumers is noticeably higher. ForLeading social media teams are there- independent producers, PR firms, example, consumer engagement forfore taking steps to build publisher- and even their own internal creative auto-related social media contentlike capabilities. They are rigorously resources. spikes on Sundays, when consumersprioritizing content topics that will are researching cars and planningresonate with their communities and Media executives have always showroom visits. The design of socialthat align to their overall marketing understood that it matters how many media content and posts also matters.and promotional programs. They consumers watch, read, or listen A random sample of users on Buddyare developing “editorial calendars” to their content. Marketing execu- Media platforms in the fall of 2011to emphasize specific storylines and tives should have the same mind-set showed that social media contentstory types, and ensure a steady as they expand their social media with a clear “call to action”—eitherstream month by month, week by efforts. As platforms like Facebook, online or offline—drove 30 percentweek, and hour by hour. They are Twitter, and YouTube become more more activation than more static, lessoptimizing content for discovery and crowded, thoughtful distribution— action-oriented posts.sharing—even elevating their brands including scheduling, packaging,to act as trusted “filters” that aggre- and placement—is increasingly Finally, though many consumersgate the most brand- and audience- important for breaking through the may “like” a brand, few brands arerelevant third-party articles and links. conversation clutter. Buddy Media’s in a position where they can attractFinally, brands are working with an own research has shown that there a sizable, regular audience to theirBooz & Company 15
  • 18. branded social media sites. The most these realities, companies must excel aggressively upgrade and expandvaluable real estate for a marketer is at developing brand-relevant con- their content development talent.actually the newsfeeds of its brand’s tent that drives posting and sharing. The Booz & Company/Buddy Mediafans. On Facebook, according to Furthermore, by creating shared survey found that among companiesthe digital measurement and busi- content, companies also increase their with dedicated social media staffs,ness analytics provider ComScore, marketing productivity; they achieve 49 percent have dedicated in-houseconsumers spend 27 percent of their a “multiplier effect,” whereby mes- creative talent. Another 35 percenttime—more than for any other single sages connect not just with fans, but are actively building their contentcategory—on their own homepage with a potentially much larger group teams. Among those planning to hireor newsfeed. They are also at least of friends of fans as well. social media talent within a year,40 times more likely to consume 72 percent are prioritizing creativebranded content in that newsfeed For all of these reasons, many resources—producers and editors—than to visit the brand’s page. Given marketers say they plan to above all other needs. Among companies planning to hire social media talent within a year, 72 percent are prioritizing creative resources above all other needs.16 Booz & Company
  • 19. CAPABILITY Marketers increasingly need real- time insight into their audiences and • Level 2: Engagement. Marketers have moved beyond counting fans.PRIORITY 3: the impact of their content to know They have insight into the activitiesREAL-TIME whether their social media efforts are on target or off the mark. How in their communities. They analyze the drivers of participation andANALYTICS much content is being shared and by amplification, studying the patterns whom? Which social platforms are in comments, likes, shares, and getting more traffic and engagement take rates. than others? How are brand influenc- ers and advocates behaving? What is • Level 3: Advocacy. Marketers can the community saying about a brand? identify and encourage user behav- And what actions are fans taking? iors that are associated with brand Robust, well-structured social media commitment. These include such analytics and metrics are fundamental metrics as intent to recommend, to addressing these important ques- referral and reshare activity, com- tions, and thus critical for a contem- ments and followers per user, and porary digital marketing capability. brand favorability, consideration, and preference. The Booz & Company/Buddy Media survey and related interviews indicate • Level 4: Return on Investment. that there are four levels to a real-time The most sophisticated companies social media analytics capability, with set out to achieve strategic business progressively more sophistication: objectives with their social media analytics. Most companies are still • Level 1: Reach. Marketers under- not fully at this level. For example, stand the social scale of their according to the survey, only about brands. They know how many 40 percent of companies have fans, followers, subscribers, visi- metrics in place today to measure tors, and views they have, and how ROI-focused key performance many discussions are taking place. indicators (KPIs) such as purchase They have visibility into where, intent, leads generated, conversion when, and in what context their rates, or actual sales. brand is being discussed.Booz & Company 17
  • 20. The survey also confirmed that A few corporate trailblazers are Net Promoter Score (indicating howmarketers are concerned about the demonstrating that social media can likely a customer would be to recom-quality of their social media metrics drive measurable results and busi- mend Dell to a friend or colleague)and analytics. Sixty percent of the ness impact—in other words, they are and on the impact of social mediarespondents said they are not satis- gaining a lot more than likes. Wendy experiences, including content aroundfied in this area. Only 50 percent of Clark, senior vice president for inte- ratings and reviews, on Dell loyaltycompanies have social media–focused grated marketing communications and and recommendation value.KPIs and dashboards in place today; capabilities at Coca-Cola, has sharedanother 47 percent are actively build- publicly that the beverage giant’s In addition to measuring businessing them. Many companies view analytic capability is advanced enough outcomes, social media represents an“expertise in social media measure- to know that Coke social media fans enormous opportunity for unfiltered,ment, monitoring, and tracking” as are twice as likely to consume and 10 direct consumer insights into brand-a core part of the value proposition times more likely to purchase than ing, customer service, and productassociated with third-party vendors, nonfans. In personal computers, Dell development. Fifty-six percent ofsuch as agencies, software providers, has focused relentlessly on analyzing companies surveyed are already usingmedia companies, or consultancies. the connection between social media social media to support their marketThere is also a tension between the engagement and revenue generated in research and consumer insight activi-broad goal (expressed by 60 percent physical as well as online stores. Dell’s ties. Eighty-one percent believe thatof respondents) to link social media leaders understand how social media they are capturing helpful consumermetrics more closely to business out- impacts loyalty, product innovation, insights from social media today. Sincecomes, and the more immediate need brand favorability, and even costs 56 percent are investing actively to(expressed by 90 percent) for social (such as the cost of customer sup- improve the quality and quantity ofmedia metrics to be tailored to meet port). These insights into business consumer insights from social media,the objectives of specific individual drivers and outcomes have led Dell to this analytic capability should becomecampaigns. concentrate heavily on the health of its even more robust very soon. Social media represents an enormous opportunity for insights into branding, customer service, and product development.18 Booz & Company
  • 21. THE MIND- In addition to these three capabilities, several soft factors—mind-sets—are gized by uncertainty, who are tech- and consumer-savvy, but also knowSETS OF SOCIAL equally important to social media and what they don’t know, and knowMEDIA SUCCESS digital marketing. The senior leaders interviewed for this study repeatedly how to pursue and test potential solutions. Most important, they pointed out that it takes a differ- analyze every experience, they learn ent personality and a different set of from it, they seek out new sources of behaviors to be successful now than it input and inspiration, and they keep did in the traditional “command and moving forward. control” brand marketing world. Of course, classic management and brand The Booz & Company/Buddy Media marketing skills still matter. But when study identified several other soft a new product announcement from factors that are important to social Google, Twitter, or Facebook can media success. Ninety-three percent dramatically change the opportuni- of the respondents said that having ties available to a marketer over- a clear set of champions and owners night, companies need more flexible, for social media within the enterprise dynamic, and entrepreneurial execu- is critical to building strong social tive talent than ever before. media capabilities. A related element is support within senior management. Venky Balakrishnan, global vice Development of capabilities for social president for marketing innovation at media cannot be perceived as a minor Diageo, the world’s leading premium initiative for “just the young people” spirits company, says next-generation in the company. Finally, education marketers need to be “universal is critical. Today, two-thirds of the soldiers: learning machines who companies surveyed have dedicated move fast and who can constantly social media staffs in place, and one- adapt to new situations, almost like third have an executive assigned to Navy SEALs.” In an environment lead social media efforts. Nonetheless, where developments occur quickly, about 50 percent of those surveyed consumer behavior is dynamic, and said they still need more education playbooks are rewritten constantly, in their executive ranks about social companies need talent who are ener- media and its value.Booz & Company 19
  • 22. MOVING While many companies are still catching up to their consumers in Today two-thirds of the surveyed companies dedicate 5 percent or less FORWARD social media, the Booz & Company/ of their digital marketing spend to Buddy Media study shows they are social media. Within three years, indeed gaining. They are taking this proportion will reverse: 87 important steps to transform percent of these companies expect their capabilities in community to cross that 5 percent threshold. In management, content development, fact, 50 percent of the companies and real-time analytics, and they surveyed expect social media to be are bringing a more contemporary the fastest-growing portion of their mix of hard and soft skills to their overall marketing spend. In three marketing efforts. As this evolution years, 56 percent of companies continues, they will also be in an expect to spend 10 percent or more even better position to shift budgets of their digital marketing budgets accordingly. on social media, with 28 percent expecting the figure to exceed 20 Survey respondents expect their percent. Not a single respondent spending on social media activities reported a plan to spend a smaller to accelerate over the next three percentage of the digital marketing years, with social media taking budget on social media moving an expanding share of corporate forward (see Exhibit 4). expenditures on digital marketing.ot Core to Exhibit 4rall Strategy Social Media Spend as a Percentage of Digital Marketing Spend Today 3 Years from Today 7% 13% 5% 28% 22% 32% 67% 27% < 5% 5-10% 10-20% > 20% Note: Numbers may not add up due to rounding. Source: Booz & Company/Buddy Media Campaigns to Capabilities: Social Media and Marketing 2011 survey results 20 Booz & Company
  • 23. Within social media, where do The money for this investment is longer-term threat it poses to morecompanies expect to spend their mostly coming out of existing digital established elements of the media Interestingly, despite budgets. That should be no surprisethe growing amount of clutter to the portals and publishers that Finally, companies are awakeningand crowding in social media have been steadily losing share to to the broader, enterprise-wideadvertising, they do not expect Facebook and YouTube over the last value of social media. Thoughto focus on buying advertising 12 months. Only 22 percent of the marketing is the dominant focusinventory on Facebook, YouTube, survey respondents have created new today, executives recognize thator Twitter. Instead, they plan to dedicated budgets for social media; social media can significantlyspend more on their own social more than two-thirds are funding enhance how they connect withmedia teams. Hiring full-time social media activities out of their suppliers, employees, and customers,employees is their number one existing digital marketing budgets. as well as consumers. They expectpriority for investment in social While far fewer companies plan to to see executives in customermedia; hiring partners and vendors shift spending from television or service, market research, productis the number two priority, followed magazines to support their social development, and sales taking aby creating more content. Media media activities, the mere fact that greater social media leadership rolebuys or paid social media is some are doing it highlights the in their companies as they pursuenumber four. branding potential that executives digitally driven innovation in these ascribe to social media and the functions too. Rather than focus on buying advertising inventory on sites like Facebook, companies plan to spend more on their own social media teams.Booz & Company 21
  • 24. THE DIGITAL social media and digital marketing company has invested in community activities now represent 60 percent of management, content development,FUTURE TODAY its marketing budget. The company and real-time analytics capabilities,AT HORSEFERRY has managed this by holding its total betting big on the benefits of marketing spend flat as a percentage leadership in social media.ROAD of revenue, and strategically reducing its expenditures on traditional This journey began shortly after print media. It has also revamped Angela Ahrendts became CEO of, turning it into a Burberry in 2006. She crafted anThink back to the Burberry content-driven destination where aggressive plan to turn the companyexperience. A venerable company consumers can engage, interact, and around, with digital marketingand brand engaged in a radical purchase. Burberry has deployed innovation as one of the centraltransformation: a strategically “retail theater” technology in its focus areas. Six years later, look atfocused and substantive digital stores to provide shoppers with a the results. Burberry has a Facebookmetamorphosis that goes far beyond rich audiovisual experience, blurring fan base that is larger than that ofslick marketing concepts dressed the line between the physical and all the major U.S. fashion magazinesup in trendy technology. Burberry’s the digital. Along the way, the combined (see Exhibit 5). The fanExhibit 5Facebook Fans: Burberry vs. Major Fashion Magazines, U.S. Versions as of February 2012 10.70 2.17 0.42 0.32 0.14 0.11 0.10 Burberry Vogue Elle InStyle Marie Claire Harper’s Bazaar WNote: Numbers represent millions of people who “like” each brand’s Facebook page, as of February 2012.Source: Facebook; Booz & Company22 Booz & Company
  • 25. base, also active on Twitter, YouTube, statement (appropriately availableand, now constitutes on YouTube), Ahrendts elaborated Resources: Burberry’san interconnected, linked, and owned on this point. “You have to create Social Media Ecosystemmedia ecosystem. This gives Burberry a social enterprise today,” she said. The Facebook Burberryunprecedented opportunities to build “You have to be totally connected Page (content, community,its brand, market its products, and with everyone who touches your commerce): www.facebook.engage with consumers directly across brand.” The Booz & Company/ com/#!/burberrychannels, platforms, and mediums. Buddy Media study confirms thatNot coincidentally, Burberry has this digital-social transformation Burberry’s YouTube Channelcontinued to increase revenue and is occurring not just at Burberry’s (live streaming, campaigns,strengthen its brand. Most recently, headquarters on Horseferry Road in how-tos): company announced a 21 percent London, but also in Atlanta, Austin, user/burberry?ob=4rise in third-quarter 2011 total Beaverton, and many other placesrevenue over that of the same period where forward-thinking executives Twitter’s Burberry Feed (livein 2010, with same-store sales growth lead. For most companies, however, events, real-time news andof 13 percent over the period. These their social media journey is just updates):!/most recent achievements have all beginning. By focusing on developing burberryoccurred during the most turbulent distinctive capabilities in community Burberry’s own homeglobal economy since the Great management, content development, page (content, productDepression. and real-time analytics, they too information, commerce): can not only create rich new social www.burberry.comAhrendts has repeatedly attributed the media experiences for their customerscompany’s solid financial performance but, like Burberry, transform their Art of the Trench websiteto its investments in digital marketing organizations and unlock market- (user generated andas well as its innovative design leading performance. professional photographs)and retail strategies. In a video artofthetrench.comBooz & Company 23
  • 26. L’Oréal: Developing Social Media Mind-Sets and Skill Sets Survey Methodology “I’m an evangelist,” says Rachel Weiss, assistant vice president for In 2011, Booz & Company and digital strategy and interactive marketing at L’Oréal. “Social media is Buddy Media surveyed 117 not just a new marketing tool; it’s so much more. It’s a fundamentally companies across a broad different operating mind-set.” range of industries. The online survey addressed social As Weiss points out, getting social media channels up and running media platform priorities, is only the starting point for marketers who want to develop this use cases, benefits and key capability. From there, identifying the right talent to run these channels success factors, challenges and cultivating a social media–friendly mind-set inside the company and concerns, resource are key to success. “You have to embark on a campaign of constant requirements, organization education internally, not just with your digital teams, but across the needs, spending trends, and organization—executives and marketers and HR professionals and metrics. Booz & Company and consumer insights.” She explicitly sets out to demonstrate for these Buddy Media supplemented colleagues the power and reach of social media and how it can be this quantitative survey with a used to transform consumer relationships. series of in-depth executive Weiss has pursued multiple strategies for building traction for social interviews focused on the media across L’Oréal. “I’ve found that reverse mentoring works very capability priorities, key areas well,” she says. “If you have a social media evangelist sit down with for investment, evolving role an executive to show her how Twitter works, what she can do on of partners, and major issues Facebook—if you can get her engaging in a real hands-on experience related to organization, talent, with consumers on these digital platforms, that’s a great start.” and metrics that companies She also recommends drawing attention to the size of social media are confronting vis-à-vis social audiences: “The other way to reach busy executives is through the media. numbers. We’ve done studies on digital listening, and sharing the sheer volume of conversations happening every day around our products and brands—with or without our direct involvement—is very eye-opening for senior executives.” Social media requires not only a new mind-set but also new skills. This means that companies need to develop different recruiting criteria. “When I interview candidates, I’m looking for people from diverse backgrounds who are willing to experiment. They have demonstrated the ability to marry the left and right sides of their brain—the creative and analytical,” says Weiss. “I also ask candidates to describe their digital lifestyle—if they are not caught up in social media at home, they are not going to bring that passionate engagement, hands-on attitude, and curiosity that we know is essential.” For Weiss, the ultimate end goal of social media marketing is to drive consumer engagement that leads to measurable gains in revenue. “I think most companies are still primarily focused on building fans and followers, but we have our eyes on a greater prize. We want to cultivate advocates and convert their insight and interest in our brands into product purchases.”24 Booz & Company
  • 27. About the AuthorsChristopher Vollmer is a Karen Premo is a principalpartner with Booz & Company in Booz & Company’s globalbased in New York. He leads media and entertainmentthe firm’s global media and practice. Based in New York,entertainment practice, and she works with media andhas extensive experience consumer-facing businessesadvising clients in digital media, on digital and social mediaconsumer marketing and digital strategy, sales force andtechnology. He is the author of marketing effectiveness,the best-selling book Always capability building, growthOn: Advertising, Marketing and strategy, and organizationalMedia in an Era of Consumer design.Control (McGraw-Hill, 2008).Booz & Company 25
  • 28. The most recent Worldwide Officeslist of our officesand affiliates, with Asia Middle Eastaddresses and Beijing Brisbane Helsinki Abu Dhabi Detroittelephone numbers, Delhi Canberra Istanbul Beirut Florham Parkcan be found on Hong Kong Jakarta London Cairo Houstonour website, Mumbai Kuala Lumpur Madrid Doha Los Seoul Melbourne Milan Dubai Mexico City Shanghai Sydney Moscow Riyadh New York City Taipei Munich Parsippany Tokyo Europe Paris North America San Francisco Amsterdam Rome Atlanta Australia, Berlin Stockholm Boston South America New Zealand & Copenhagen Stuttgart Chicago Buenos Aires Southeast Asia Dublin Vienna Cleveland Rio de Janeiro Auckland Düsseldorf Warsaw Dallas Santiago Bangkok Frankfurt Zurich DC São PauloBooz & Company is a leading global managementconsulting firm, helping the world’s top businesses,governments, and organizations. Our founder,Edwin Booz, defined the profession when he estab-lished the first management consulting firm in 1914.Today, with more than 3,300 people in 60 officesaround the world, we bring foresight and knowledge,deep functional expertise, and a practical approachto building capabilities and delivering real impact.We work closely with our clients to create and deliveressential advantage. The independent White Spacereport ranked Booz & Company #1 among consult-ing firms for “the best thought leadership” in 2011.For our management magazine strategy+business,visit to learn more aboutBooz & Company.©2012 Booz & Company Inc.